I. Formation

Question 1

Definition of a Partnership

Answer 1

• An association of
  
  • two or more persons
  • to carry on as CO-OWNERS
  • of a business for profit,
  • whether they intend to form a partnership or not

Question 2

Factors to indicate if there is a partnership

Answer 2

To determine who is a partner, look to the following factors:

1. CAPITAL: capital contribution is not required but it can tip scales to them being a partner
2. CONTROL: right to control may be enough even if control never exercised (b/c owenrs usually have right to control ops)
3. PROFIT: IN georgia most importnat. A pesron recieving a share of profits is PRESUMED to be a partner
   
   • although rebutable
   • if receive profits as wages, rent repayment of a debt or interest on a loan, does not create a presumption
   • Does not create a presumption if you share gross receipts

Question 3

Formalities: Writing

Answer 3

• None required unless contract falls w/in the Statute of Frauds

Question 4

Formalities: Statement of Partnership

Answer 4

• a partnership MAY file a statement of partnerhips w/ superior court clerk of any county disclosing WHAT IT WANTS TO MAKE A MATTER OF PUBLIC RECORD
• very few do this
• but if they do, a statement of partnership is sufficient to find a partnership

Question 5

Partnership by Estoppel

Answer 5

Fall back position if you don’t find a partnership

• IF no parnership is formed, parties may still be liable AS IF THEY ARE PARTNERS to protec reasoanble reliance by 3P
• EXAMPLES:
  
  • allowing someone to hold you out as a partner
  • Holding someone out as a partner
  • Other creditors may be able to reach it, even if they weren’t recepient of being held out as partnership, if being held out was said publicly
  • Applies only to contract situations–NOT TORTS